How Much Should Uber Pay Its Drivers?

Uber has been making significant upgrades to the driver experience over the past few months, but one thing missing from all of these announcements is a rate increase. Tipping and additional destination filters will have a positive effect on a driver’s bottom line, but they don’t address the core issue for many people: drivers just aren’t paid enough.

Uber and Lyft cut rates 3 years in a row from 2014-2016, so drivers are making less today than they ever have. While Uber has always claimed lower rates mean higher utilization and thus higher earnings for drivers, I have never bought that argument. Lowering rates helps Uber grow its market share, but it also means more dissatisfied drivers and higher churn rates since drivers care most about pay and flexibility.

Uber has been able to make it work with lower rates because there is a learning curve for drivers and the company is able to spend heavily on recruiting new drivers to replace those that are quitting. But with losses in the billions of dollars a year, that model isn’t sustainable forever.

And while a lot of the positive changes Uber is making as part of the 180 Days of Change campaign are a good thing, the real question is are they enough? If Uber is going to tout driving as a revolutionary new employment opportunity and wants more satisfied drivers, shouldn’t they be paying the average driver more than minimum wage?

Why Does Uber Want Lower Rates?

Uber was competing against taxis when they first launched in 2012-13, but these days, it’s hardly a competition. Uber is 60-70% cheaper per mile than a taxi in cities like Los Angeles and San Francisco and provides a superior customer experience.

Uber has gained massive market share from taxis during that time, but taxis still have some inherent advantages, like the ability to accept street-hails and line up at taxi stands. So lowering rates further isn’t going to help drive taxis out of business any more than what’s already been done.

Rideshare passengers do care about price though, and when Uber lowers rates, passengers take more trips. So it should be clear that the main reason Uber has continually lowered rates is to grow their market share. Most Uber passengers use the service casually these days, but if the cost continues to come down, you might see consumers ditching their cars in favor of taking Uber everywhere they go. And that would turn the casual user (1-2 trips per week) into someone who relies on Uber every time they need to leave the house (20-30 trips per week).

Uber could raise rates at any point, but that would slow their growth, and now they’ve also got Lyft to deal with. Uber dominates Lyft when it comes to metrics like number of rides per day (8 million to 1 million) and valuation ($70 billion to $7.5 billion) but Lyft is still competitive with Uber in a lot of major markets. Since passengers are so price sensitive, if Uber raises rates and Lyft doesn’t, they will lose market share fast.

How Much are Drivers Making Today?

In January of 2017, we surveyed over 1,100 drivers and they reported earning an average of $17 per hour before expenses. After taking into account a driver’s expenses (average cost of $0.32/mile), the net payout to a driver drops to around $11 per hour. So the average driver isn’t making a lot and that’s a big reason why so many of them end up quitting. But since there’s a learning curve and a lot of vehicle expenses (increased oil change frequency, brakes, etc) are delayed for 3-6 months, it may be a while before drivers realize how much they’re ‘really earning’.

Uber has reported half of all drivers quit after just one year and while Uber’s 180 Days of Change might get them to stick around a little longer, that level of churn isn’t sustainable forever. Now that Xchange is on the chopping block, there’s only so many able bodied workers with eligible vehicles out there, so Uber’s eventually going to have to pay existing drivers more in order to get them to stick around.

What Expectations Does Uber Set?

Uber touts driving for the company as a revolutionary and innovative type of job. I’m sure you’ve heard or seen the marketing slogans that say ‘Be Your Own Boss’ or ‘Get Your Side Hustle On’ and although they don’t make specific income claims anymore, Uber is definitely framing it as something more than your regular old retail job.

This works well in recruiting new drivers, but you also have a lot of new drivers coming in with lofty expectations. One of the biggest complaints I hear from new drivers is that they aren’t making enough money and if their expectations were a bit more realistic, I think they may stick around a lot longer. A driver’s first few months probably won’t be too lucrative since it’s more about learning the system and experimenting with the best times and places that fit with your schedule. But if you’re expecting to make $20 an hour from day one, you’re probably going to be disappointed.

Uber Pay vs Other Industries

If we look at the typical service job working for a company like McDonald’s or Walmart, there aren’t a whole lot of major barriers to entry. You’ll have to go through the application and interview process and maybe some training, but you don’t need to bring much to the table other than yourself.

With Uber, there’s an online background check, but you also need a smartphone and an eligible vehicle which creates a bigger barrier to entry. Additionally, there’s a lot more responsibility as an Uber driver since you are transporting people around and their lives are literally in your hands.

Where it gets complicated though is that with typical service or retail jobs, everyone makes about the same amount of money. Baristas at Starbucks make an average of $9.54 per hour but with Uber, there’s a wide variation in pay depending on where and when you drive and even how savvy of a driver you are.

If the average Uber driver is earning around $11 per hour after expenses, that means there are a whole bunch of people above that amount and a whole bunch of people below that amount. Uber doesn’t exactly advertise that you can make below minimum wage, but for some drivers, that’s a real possibility.

What Should Uber Drivers Make?

It’s tough to say how much Uber should pay its drivers, but I think we can all agree it should be more. We know the rates they’re paying today are not sustainable since they’re losing so much money every year, but how much should they go up? You could argue that it’s up to the market to decide since no one is forcing you to work for Uber, but the company is also subsidizing a lot of their current losses with investor money, so it’s not quite a fair fight. Also, I think if Uber’s going to posture driving as the Ultimate Side Hustle, they need to pay the average driver accordingly.

Since the barrier to entry for driving and the level of responsibility is greater than your typical retail or service job, I think drivers should be paid a premium. Right now, drivers earn around 70 to 80 cents per mile depending on the city, but I think that number should be about 25-75% higher.

If we assume that an increase in rates would lead to a similar increase in earnings, that would put the average driver’s earnings after expenses at around $13.75-$19.25 per hour. I think that range represents a fair amount for the work that a driver puts in.

Due to the nature of the job, I don’t think you can avoid some people driving for Uber and making less than minimum wage. If you’re only going to drive Tuesday through Thursday in the afternoon when demand is at its lowest, you’re not going to make a ton. But the average driver shouldn’t be near minimum wage after taking into account expenses. Uber touts this job as something a whole lot more than a minimum wage type job, so the pay for the average driver should reflect that.

But Drivers Can Still Make More

If there’s one thing I’ve learned from talking with tens of thousands of drivers about their experience over the years, it doesn’t pay to be just average. A lot of drivers get into this line of work excited and ready to work hard, but they just don’t earn what they were expecting. And when you start to add in the increased maintenance and depreciation on your vehicle, a lot of drivers eventually see that it’s not worth it financially for them to continue to drive.

In order to make this job work, you really need to be above average. As a driver, I can’t control what Uber is going to pay me, but I can control when, where and how I drive. And those factors can have a surprisingly big impact on your earnings. I know there are drivers out there who just want to be average and get paid well ,but I don’t see that happening any time soon. So why not take matters into your own hands in the mean time?

Readers, what do you think about driver pay? What do you consider “fair” given how much, when, and where you drive?

Rydar: The Ultimate Assistant For Rideshare Drivers

Rydar is like radar for finding the best rides. Optimize your routes, increase earnings and effectively manage your finances. Check it out here!

I'm Harry, the owner and founder of The Rideshare Guy Blog and Podcast. I used to be a full-time engineer but now I'm a rideshare blogger! I write about my experience driving for Uber, Lyft, and other services and my goal is to help drivers earn more money by working smarter, not harder.

when Uber first launched here in Vegas, oct 2014…..the rates were 3x what they currently are. the demand, although new, was huge. rides from my area to the airport put $35 to $40 in my pocket….and that was great. my average ride around my area, was around $15. Passengers openly tipped as well. things were great and then Uber was told to cease operations. Uber did send us $100 a few weeks later and then another $100 a few weeks later. today, we know what the rates are. I do feel that most if not all of current passengers would not object to getting back to where rates can and should be. what I hear and feel like that I do know, is that it is more about the convience of a ride that is available almost instantly. most drivers are excellent, especially here in vegas. I have taken uber as a passenger in LA and in Memphis….LA was a joke, but Memphis, my drivers were great and thrilled but also disappointed by the fares. I tip. when I tipped my drivers in Memphis, they were elated. when I tipped in LA, I got the “is this what you call a tip” tax look…….If uber raises fares, their cut goes up as well. just look at xl….do those passengers complain or do they say “thank you”….thinking most say thank you…..things are so so so very much better since the changes at the top….let’s keep the improvement going….and can we do that by raising rates just as uber raises books fees and other creative income streams….???? the more partners as drivers earn, I feel that passengers will be even more satisfied as well……

Without surges Uber/ride share is nothing but a scam to get honest hard working people to work for minimum wage or less ( with no benefits) after ALL expenses and depreciation. The new CEO said in his first speech the plan is to go public in 1.5 years. IMO the business model is not sustainable unless they can use driverless cars (the government agreed to allow GM & others approx 100k DRIVERLESS cars on the road in the next 3 years WITHOUT any state local regulations). So the plan is to work and pay the drivers like mules and drain investors dry until that day. The first investors/stock holders and employees given stock who can quickly sell after IPO will be the only winners.

Zhabiz Moshari

Harry my friend, I am one of those old history rideshare drivers like yourself but I did drive and I never thought of making an income from selling my info or acting as a mediator like yourself. You did it and I used to follow you and everyone of your topics until I figured that even you alone aren’t able to catch up with all related info in this industry. Sad story but true. I think you are writing recently mostly make majority of other drivers either confused or disappointed. Haven’t you ever thinking about retirement in this field yet? Most likely not but as an old friend, I am recommending you to consider that. At least you are not loosing anything if you ended up with a big NO. You will keep on writing as you have used to and tens of people are reading it as usual.

Your comment doesn’t really have much to do with this article but why would I retire from a business that reaches hundreds of thousands of drivers a month, employs multiple people and makes a full-time living for myself?

Zhabiz Moshari

I talked to you Harry as a friend which I really feel right about. In respond to your question I have already shared and stressed out about the reasons and as you can simply find them it doesn’t have anything to do with just this particular article but what you have written recently and the direction you are taking which is quite different than the Harry I used to know kinda two years ago. And finally yes you are right about it. YOU have already made a full time living out of it. Not only because of what you encountered but bunch of advertised that some vendors are doing under your name and guidance for thousands of potential drivers who believe in what you are saying and suggesting. Don’t give me wrong, this last part is all good but what I talked about is about something different. When you choose a subject to open a discussion about it is totally up to you on what to choose and how to conduct the whole content. They are mostly leave people with either confusion or disappointment and this is what I gave you a head up about. You don’t have to be agree with me specially from where you are after years of hard work that you left behind to get to this point as you are but I had something to share with you and I do like you as well as highly respect so I did my responsibility to share. The rest is quite up to you while I didn’t say, go for retirement but just consider that and I am pretty sure you are enough smart to understand the difference.
Anyways, good luck and be well which after all these are all that matters the most.

VMC

I doubt Harry was ever an old history driver like you. I believe since day one, he’s looked at rideshare as part of starting a rideshare website.

He’s been interviewed zillions of times by media such as CNN, US News,etc,etc, with golden opportunities to be a true advocate for drivers by getting the message out to an uninformed public that drivers are poorly paid, and many have gone through repos and bankruptcies because of the pay cuts, but he refuses.

In fact, in every interview I’ve seen, he always makes it a point to say some drivers are doing well.
Yea, well some people win Powerball jackpots.

Check his interviews. He always uses wishy washy guarded language, being careful not to offend the companies that put money into his pocket.

As far as retirement is concerned, up until recently, he’s been basically an absentee landlord of this website, and that’s probably been a big factor in the huge dropoff in blog participation on this site and probably readership,too. Less readership means less $

Since he’s started being more active, the blogs are busier, although many of the veterans of this site have disappeared.

Absentee ownership turns off readers. I’ve seen it happen with other websites over the years. Readers figure if the owner doesn’t care, why should they.

I think my sample size (based off e-mails from drivers, interactions in person, social media) is more representative of the average driver than cruising social media (FB groups, uberpeople and even my blog) exclusively.

And if you’re comparing PowerBall winners to number of happy drivers, I think that’s a total non-sequitur. It doesn’t line up with my experience and the surveys we’ve done of thousands of drivers which show that more drivers are satisfied working for Uber than dissatisfied: therideshareguy.com/rsg-2017-survey-results-driver-earnings-satisfaction-and-demographics/

After the 180 days of change, I expect the satisfaction numbers to go up even further. But yes there are still lots of things that can be improved and pay would be at the top of the list.

PS – Where are you guys getting your info on my involvement on the site? If anything, I’d say it’s been the reverse with me spending less time on the day to day of the site and letting my team take more of the work. I’ve always done 1 article every 1.5 weeks, 1 podcast every 2-3 weeks and 2 videos a week though for 4 years in a row…

VMC

The massive turnover rate in rideshare speaks vastly louder than any of your surveys. When drivers were paid well, turnover was low and morale was high.

C’mon, you know Powerball was used to make a point.

Forget about the 180 days, if drivers can get the rates I proposed in my other post, driver satisfaction will shoot up and turnover will plummet.

Did you read my post? I stated you’ve been an absentee landlord of this site, and I believe that’s the main reason the blogs have slowed considerably. Many of the veterans have stopped blogging here. Bloggers tend to lose interest in a site when they believe the owner has lost interest.

Maybe it’s a coincidence, since you’ve been participating more recently, the blogs have gotten busier. That’s probably the reason you’ve returned.

Lower blog action probably means lower hit rate which means fewer $

As I’ve said, you’ve had golden opportunities to be a strong driver advocate, but you’re chosen to play it safe and not bite the hands that feed you.

Recently, I saw an interview you did with a DC radio station about upfront pricing, and after again saying some drivers are doing well, I’ll paraphrase you said “drivers haven’t necessarily benefited from upfront pricing”.

That lame comment was the best you could do?

Zhabiz Moshari

I am kinda agree with you on some important points but not the whole. The question is, what would we doing if anyone of us were right where Harry stands? It’s just too hard and super complicated to judge others while there are always a lot we don’t know about individuals. But don’t give me wrong, I am not trying to defend him. I think about the whole in a positive way as finally there are a huge margin of drivers who doesn’t even know the basics and obvious essentials are learning from what he is going. I personally never expected him to be the drivers advocate simply because he is not qualified for the job. He has made a website when No one could even thought about and ever since he started gathering information from thousands of drivers and it’s what he has. Information is very valuable but does it neccesserly makes him a person with a reasonable judgment? I can hardly accept that.

VMC

To answer your question, no, I wouldn’t be doing it the way Harry does. I’d make sure there was no conflict of interest, or even an appearance of one.

He claims he started this because he was passionate about trying to help his fellow drivers, not for the money. Well, it looks like he lost his way.

On one hand, this site gives tips on how to make more money( in reality it means how to make the best of a bad situation), on the other, he runs advertising for the companies that are screwing over the drivers he claims to be trying to help.

And worse yet, he rakes in thousands of dollars a month doing referrals for these companies, which crowds the streets with even more drivers. This means fewer rides for the current drivers, and lower pay rates being offered because quitting drivers get replaced more easily.

Where’s his passion for helping drivers when he does interviews with the news media? He could certainly help drivers in a big way by using his media exposure to really push for much better pay.

As I’ve pointed out, he refuses to rock the boat. He wants their money.

Sergio

Well done! Easy money in this gig was driving a couple of years ago, since all the price cuts, it’s referring new ants. Can’t blame Harry for doing that, he saw the change and took advantage of it like any entrepreneur would do. I have asked him numerous times to put some veteran drivers on his podcast to inform armies of ants that there is another way of doing rideshare besides driving aimlessly with their app on, accepting each and every base ride that comes their way. Unfortunately, the supply of drivers have exploded to the point that dissemination of even the basic information will be a difficult task. Not sure if everyone read the idiotic LA Times article regarding Uber drivers supposedly gaming the system by just getting together and turning their app off to create surge. It sounded like how dare these drivers do something like that. Why the hell not? Good for them, they’re playing the same game Uber does. Please, remember that Uber has no cars if they don’t have yours.

Ruven Golan

i’ve driven 1yr 8mos have a decent 4.82 rating and a clean 2013 Buick. I also know how to count,in fact very well. I don’t drive at all the best times like Saturdays and nights. Pay is usually minimum wage or less AFTER expenses and taxes. I’m looking for more profitable work

Mabaq

Agreed, without surges it’s a scam to get people who wouldn’t normally work for minimum wages to work for minimum wage or less! lol

I think history is repeating itself. Just like the government stepped in to protect American workers they’re going to have to step in to protect so-called independent contractors who are working 60/70/80 hours a week for less than an hourly minimum wage employee. They think they’re smarter than everyone else creating independent contractors who have to work almost double the hours to get the incentive crumbs.

Ruven Golan

fools are born every day

Jim

Both Uber and Lyft need to raise rates. They can’t seriously increase driver comp just by cutting their take so much as I’d like them to do that as well (really, they’re a brokerage putting rider & driver together) – in most industries that would be a 20% type of fee. But as you point out, if they raise their rates, Lyft will start to pull in marketshare. However, if a driver is making more from Uber he may be less inclined to work for Lyft when it cuts his pay. So the viable way to do it is to raise rates slightly – then as drivers see the extra dollars and focus more time with Uber, Lyft will raise as well, then Uber should repeat the process. This is very similar to the way the airlines have historically raised rates without impacting overall passenger volumes or permanently yielding marketshare.

Over time if Uber (& Lyft) can hit about a 25-33% better price than taxis, the passengers will stay – a better experience for less money. When I’m traveling I try never to use a cab – they’re almost never new, clean or fresh. Ubers & Lyfts almost always are. Even when I’m traveling on my company’s dime and the price of the cab isn’t mine and won’t be questioned, I want the better experience. I don’t think I’m alone.

Uber shouldn’t be afraid of raising rates – done correctly they’ll end up with the same marketshare (in the 1st world countries anyway) with drivers who insure there’s a good supply because they’re finally earning enough to make up for providing their own vehicles, maintenance, insurance, etc.

Most industries pay a 20% brokerage fee? Are you kidding? Real estate brokers average 6%.

Jim

6% on a multi-hundred thousand dollar sale, not on a $20 fare.

G Kellop

While making a comparison to pay as a Baristas at Starbucks, the comparison is way off. There is no accounting for risk, roads are very risky. I have dodged so many drunk drivers and distracted drivers. I don’t think the expenses are calculated correctly. High Mileage and Insurance on your car is one thing, Drunk or inconsiderate passengers damaging your doors or interior is another factor.

Yea that’s a good point on the risk, typically you’re compensated more for riskier jobs. I think the drunk/inconsiderate pax damaging your car is pretty rare though (Uber does cover vomit clean up fees). And like I mentioned in the article, if you’re a good driver, you should avoid nearly all these types of situations in the first place.

Ex: I always tell my pax to exit on the sidewalk side if we’re on a busy street so they don’t open the door into oncoming traffic and get hit by a biker or car. Many drivers do not do this and if the car door was to get hit, I’d say that’s mainly their fault.

scott myers

Regarding comparisons to Starbucks and McDonalds, it should be noted that full time employees get benefits and all employees pay just 7.65% social security tax, as compared to no benefits and the 15.3% self employment tax that ride hailing drivers pay.

Peter Darras

When I Joined X class paid 1.25 per mile + time then was cut to .95, then .85 then .75.
The 1.25 was worth it. The rest they can keep. Government gives you .53 a mile deduction but 1/2 the miles I drove was empty.! So the .32 cents per mile you say working for uber mile leaves me .22 cents per mile in the hole. The government don’t give nothing away so .53 and uber .53 empty miles add up to 1.06 so 1.25 + mile minimal whatever that is isn’t great but I would deal with that! Thanks

Leila

If they are able to raise rates to add to the booking fees to keep for themselves & passengers have not complained then I would think they can raise those rates enough to pay the drivers what they were paying them a year ago then slowly raise them in time back to what they were originally which is still at least 50% less than a taxi.

I have driven through 2 fare decreases. I am constantly working on my car. At the same time more rides won’t help me if I’m driving as many riders as I can currently. I’d take a few extra rides if my fares are raised. I don’t chase rides so my expenses will remain the same or decrease as I use less gas and wear and tear on my car to make the same or more money.

And if one company raises fares the other will follow suit just to keep drivers. I wouldn’t drive for the company that paid the lower fare, nor would a lot of drivers with experience.

VHound

Ride share has been a very disruptive force in both the taxi biz and car rentals. Ride sharing is an evolutionary expansion of data and digital tech into the transportation world, but if you look closely at Uber you don’t see brilliance, you see ignorance. There are so many markers that reveal how badly Uber and Lyft are performing that I am not sure I can list them all, but the most obvious example is this: Both spend more money on bringing in new drivers than they do on advertising their service and taking care of the face of their companies – their drivers!

In this shallow materialistic country of ours venture capitalists have an enormous amount of clout. How much? Well, for one, with their lobbying efforts, they were able to register ride share companies as tech concerns, not transportation companies and that gave them license to bypass all the DOT regulations. Basically allowing the fox in the chicken coop. The taxi industry has caps on the number of taxis they can put on the road to maintain a certain balance of supply and demand. They do that so cabbies can make a living. But there is no cap on ride sharing companies dumping as many cars on the road as they can because it doesn’t cost them anything. And they achieve this with some of the most dishonest advertising since tobacco companies promised us that smoking was good for you and even had the gall to say that most doctors who smoked recommended Camels!

Travis Kalanick was booted for many reasons. His boorish behavior made most of the news, but in the end, it was his VC investors who saw his lack of business acumen might, in the end, turn Uber into the AOL of the ride share industry. Uber lost $2.8b in 2016 and almost $850m so far this year. This is not a business plan, this is stupidity.

If Uber wants more drivers, raise the rates and all the drivers will be driving for Uber. If Uber wants to kill Lyft, raise the rates because no one will drive for Lyft. 65% of my over 3000 pax say that price is not why they use ride share. It is the convenience, the efficiency, the no cash platform, the no waiting for a cab issue, no calling a dispatcher, just tapping your smartphone and you have a driver that can find you in the middle of Dodger Stadium.

I am paying for a new car, expensive ride share (3-gap) insurance, oil changes every 5000 miles, the gas that is now above $3 a gal, car washes, bottles of water and mints. Not to mention saving for the new tires and brake pads I see coming to town shortly. Because I drive for a living I need to gross $20 an hour or I can’t survive. If Uber and Lyft don’t get smart, realize the real demand and benefits ride share offers and pax appreciate, the game is over. Right now it looks like Uber, with Pool pax, wants to compete with the metro bus industry. Idiots.

Sergio

I liked your post until you mentioned water and mints. Are you kidding me? At these rates pax are lucky that a horse and buggy isn’t picking them up. Rideshare drivers need to make double the minimum wage on a net basis. Our lives are at risk and it is not if but when you get into an accident.

Uber=Evil Empire
Lyft=Dysfunctional Little Sister

VHound

Sergio,
To each his own. Right now I am stuck driving for Uber/Lyft. And I have two choices:
1) I can get all stressed out, hate every moment of driving and make myself and my pax miserable.
or
2) I can responsibility for where I am and accept that driving was my choice/situation and make the best of a very bad situation. Water and mints and my ‘tip’ bait – and it works.

I pick #2. I make the best of the situation and realize that my pax aren’t my enemy. I don’t know them and they don’t know me. People like Travis Kalanick and his ilk are my real enemy. Driving for Uber is what I do, but I will not let doing so destroy who I am. My ego stays in my house when I go and drive. Thus, I now explain to all that ask: “How I learned to love Uber and not kill anyone.”

Sergio

My comment to you was intended to be joke not criticism. Since you took it seriously, I thought I’d respond. I understand it’s a frustrating gig. Some days are great others terrible. We all drive for many different reasons. My number one reason is to make as much money as possible on each mile driven, dollars per app on hours and per ride. I’ve done well by sticking to my rules, I understand my job is to take someone from point A to B safely and be cordial, nothing more. The rest is an individual preference such as water, gum and mints. But I’m not in this to be nice to pax that I will only see once. Isn’t Uber a cab company with an app after all? I’ve exchanged 1’s many times and kicked rude pax out of my car. I have done over 2700 rides and carry a 4.91 rating after recently getting hit with a 1 by a 1.9x surge pool pax out of LAX at no fault of my own other than Uber gouging them on the fare. Of course ratings protection as part of 180 didn’t do crap. Got a whole bunch of cut and paste stuff from CSR.

Ruven Golan

the idiots are you and me (in S. Florida a driver that GROSSES $15/hr is having a fabulous few hours)

Sergio

Good luck with a price hike being part of 180 days of change. First month the title of the change was earnings. That was the in app tipping followed by useless live help and flexibility. All about Uber PR, lipstick on a pig. Whoever thinks that a rate hike is going to be part of the 180 days of change is a fool. Uber gave themselves a rate hike twice the last six months by increasing the booking fee and I know it’s a touchy subject for some on this board, by their upfront pricing model.

Harry, since you state in your article that you talked to tens of thousands of drivers, why don’t you tell them on your next podcast to drive with their app off and hit the no new requests tab during a ride with a pax especially after accepting an UberFool request. Start there, tell these ant armies the most basic rideshare rule. Tell them to not worry about low AR, there’s nothing Uber can do about that. Tell them if Uber doesn’t have their car in service, they don’t have cars to service the pax.

If drivers act in unison, the surge will be back and they’ll all make more money without Uber raising rates. Until then, keep hope alive for that rate hike and watch Uber ruin a great idea by lowering pay and standards on driver quality, car quality and definitely passenger quality. I know for most Uber Koolaid is irresistible but refrain yourselves from slaving for peanuts and risking your life on a daily basis.

I don’t think it will be part of the 180 Days of Change either but I do think it’s on the table with Uber’s new leadership.

And not sure why you would tun off new requests on a regular UberX ride but I always do that myself on UberPOOL and have advised it at least a few times on Youtube – might make for a good topic on its own though.

Sergio

Come on Harry, stacked pings are another reason surge is dead. People are so happy to accept base ride after base due to the stacked ping. If you’re working Tuesday and Wednesday early afternoon, I get it, do as many rides as you can, go for your lousy quest but why drive right into a surge area with your app on? To kill it? Do your research, buy Surgechaser, set your pins, within a month you’ll know when and where it surges. Drive into a surge area with a pax, drop them off, when the app asks you to keep driving or go offline, then make your decision after you see the map. That’s why you push the no new requests tab on every ride unless it’s one of those special days where the whole city is bleeding or early morning rush hour.

I think it’s unreasonable to expect all drivers to know/do this so I wouldn’t advise your strategy. If every driver did it, then yea it’d be great. But most drivers aren’t thinking like this. Either way, we did mention this as one of the reasons why surge is gone: https://therideshareguy.com/where-has-all-the-surge-gone/

Mabaq

You wouldn’t need every driver to do it only about 20 to 30% and every driver would get surge fares. It’s simple SUPPLY AND DEMAND. The algorithm is DEPENDENT on drivers having their app available for pickup.

1. The amount of drivers who have the app ON who don’t have riders and drivers with riders who’s trip will end shortly.

If riders exceed that amount it will surge.

Carina Schwallenberg Howes

I like that idea Harry. I never thought about that. Ok.. So basically pick up an uber pool and then turn the no more requests on.. Im going to do it. I agree that people would still take Uber if they raised the prices some. I think that all drivers should go on strike and demand more pay. How can we plan a strike?

Sergio

You’ve been a driver for two years and don’t know about stop new requests? Especially on pool, stick it to Fuber, they make so much money on a matched UberFool rides, it’s ridiculous. You do double or triple the work get paid 10% less. Now the only time you don’t push that tab is if you catch a 2x pool ride, then let it string as long as you can since all legs of that ride are being charged by the first pax multiplier. And you seem like you got your stuff together, imagine all the ants out there, they probably don’t even know where it is on the app. People make a big deal about 6 DF, most newbies I talk to don’t even know what DF if, let alone use 6 of them. If you’re in an area that surges a lot, turn new requests off on every ride, otherwise Uber will stack you with a base ping outside the surge zone. If all the drivers out there didn’t drive aimlessly and with the app off, we’d get our surge back.

Ruven Golan

what is a DF?

Ruven Golan

i’m not sure i understand the rational of not accepting new ride requests on uber pool – but i do understand the arithmetic of not accepting uber pool more than a few minutes away.

Ruven Golan

Harry Friend Sergio has been throwing around abbreviations like ABBA. ABAB, DF and double dip. Please explain these to me a less than cool lingo driver. Thanks

Ruven Golan

good comments

Sergio

Answering the topic directly, double the minimum wage on a net basis. Risk of life deserves at least that! DRIVERS LIVES MATTER!

Carina Schwallenberg Howes

I think that we need to be making $20 an hour clear. This is not an easy job. It has dangers and risks such as letting strangers in your car, intoxicated people, driving on roads were not familiar with, driving in hazardous conditions such as storms, and just putting ourselves out there on the road which greatly increases the chance of an accident because were driving so much more than we would be if we didnt rideshare for a living. Then if you combine several of those factors like having a stranger who is intoxicated in the car while driving at midnight in a rain storm now your hazard level is through the roof. Is that worth $10 an hour? No it isnt. However, as a two year driver for Lyft and Uber i have discovered that the amount we make can fool us if were not careful. When i make $100 I need to break it down and understand that im going to owe self employment tax which is higher , out of that money plus as you said the cost of driving… gas, wear and tear… and when we add up the time goung to get riders that we dont get paid for..that time adds up to. If i drive an average of 5 min to pick up a passenger and i give 80 rides then ive spent 400 min in one week just driving to passengers which im not paid for that time so thats about an entire work day every week that is worked for free. I now drive part time because even with knowing the ins and outs its very hard on the body and steessful with many risks. Bottom line… $ 20 an hour is what we should make after deductions

Ruven Golan

dream on – and the reason i say write this is the great majority of uber drivers don’t calculate like u did

Eric L. Watts

I’m still a relatively new Uber driver—started part-time in June, went full-time in July—and it didn’t take long for me to realize that the UberPool rate is a crock of shit. Driving 10 or 15 minutes to pick up Juan, Carlotta, their three kids and a shopping cart full of groceries from the front of Walmart, helping them load their 27 plastic bags of groceries into the trunk and then hauling them all to their apartment casa three miles away for a measly $3.75 is NOT what I expected to be doing or “earning.” Two of those trips in a row and I’ve made less than ten bucks in a hour. Also: Pool pax NEVER tip. Aside from the shitty pay for Pool trips, there’s also the bad attitude from pax when a second rider is picked up. They hope and gamble on a solo trip for a carpool rate and then act like assholes when they lose the bet. I’ve sent Feedback to Uber suggesting that pax be charged the Pool rate ONLY if a second rider actually does join the ride… otherwise, they pay the X rate. I’ve also considered not accepting any more Pool requests and accepting only on X trips, but I don’t know how badly that might affect my acceptance percentage, so I haven’t tried it.

Also, although it doesn’t happen often, I’m none too happy about not being able to receive new trip requests if a passenger destination takes me out of the Atlanta area and I have to drive back alone. If an out-of-town destination doesn’t pay a premium for the one-way, I think I should damn well be allowed to pick up new passengers on my way back.

I’ve had some great passengers and this job is better than the courier job I quit to go full-time with Uber, but Uber really needs to take better care of its drivers.

Sergio

Welcome to Fuber! Don’t accept any FuberFool unless it’s 2x+ then hope it strings out as long as it does. Otherwise, this is your business, you’re an independent contractor, your car your rules. Set your parameters as far as pick up time and distance, pax ratings etc. and never ever accept base pool pings, if you do it by mistake or to finish a quest, as soon as you accept the ride, go to your app and immediately stop new requests. Don’t worry about your AR, Fuber can’t deactivate you for low AR, they’ll send you nonsense emails, so what? Watch your CR, keep it under 20-25%.

Ruven Golan

Fuber can deactivate u for anything.

Ruven Golan

I empathize with all u’ve written. Understand tho that S. Florida is worse. Here a base uber fare is $2.47. It is rare to see surges. The problem here is that there is a large population of driver retirees who to keep off the couch will work for less than minimum wage and even more amigo and Caribbean bro drivers who don’t understand the difference between gross and net pay.

lovelygamour

I wouldnt help them unload unless they pay. Unless its a few bags so I can leave quicker and im not taking the bags in their home for no tip. Thats what a cab is for.

JTF168

” Uber has always claimed lower rates mean higher utilization and thus higher earnings for drivers..” In reality, it means more work for less paid. Going to the airport in SF used to be $50 per trip. Nowadays it takes 3-4 trips to make almost the same amount. So tired and exhausting to work harder.

VMC

$17 gross per hour average is total bullshit.

With many markets paying drivers $0.60 per mile after commission, there’s no way the average driver’s
grossing $17 an hour.

Uber’s Route Based Pricing scam is the new surge. They jack up the prices and don’t have to share it with the drivers.

It’s beyond belief that in many parts of the US, an Uber or Lyft minimum fare ride is under $3 for the driver.

The minimum after commission rates should be as follows:
$1.50 base / $1.50 per mile / $0.30 per minute / $5 minimum fare

That is what over 1,100 drivers reported earning so you can’t argue with the results but I guess you could argue that drivers are over-estimating their earnings.

The expenses part of the equation is what I think is the real problem though as most drivers don’t realize it costs $5-$6 to operate their vehicle – I have a study with Stanford CARS that will be coming out based off this data since we also gathered expense info and it isn’t pretty.

Mabaq

Have YOU ever thought that Uber and Lyft are monitoring you and this site and intentionally sent in bogus info?

VMC

Even if the drivers aren’t overestimating their earnings, the sample is not truly representative of most drivers.

Drivers who visit and blog rideshare websites, and participated in this survey are usually in the top echelon of rideshare ability.

They earn more per hour because like Curtis, they’re part-timers who employ superior strategy, including cherry-picking the most profitable hours and locations, and utilizing various tricks of the trade.

Most full-time drivers are limited in the amount of cherry-picking they can do, and most part-timers lack the superior skills and/or hourly flexibility to cherry-pick the best hours to work.

Also, there are markets that pay drivers 50-60 cents per mile, where $17 an hour is almost super human.

If those groups were part of your data, the numbers would drop considerably.

Ruven Golan

$5-6 per what?

FP

I agree here. I doubt $17 is the average. Unless there are a HIGH number of those polled that are in the high paying areas like NY… but that is a moot point as the cost of living is so much higher there.

So it’s hard to get a real, sort of means-tested adjustment. I am NOWHERE even close to $17 an hour. But I am mostly a day driver. And I don’t do Friday and Saturday nights.

One thing I worry about with that poll, is that people are just taking their time online, and dividing by their pay. And not necessarily the time they have spent out on the road. That is kinda hard to keep track of if you don’t make the conscious effort to do it. And then when they get these polls, it winds up being a gross over-estimation b/c they aren’t really sure.

VMC

The problem with his survey is it’s not a true cross section of drivers.

Most drivers who participate in rideshare blogs and surveys are the elite highest earning drivers, who have the strategy and schedule flexibility required to work the most profitable hours and locations.

And even the elites are averaging only $17 gross. The vast majority of drivers who are not the elites are averaging considerably less than $17 per hour.

Ruven Golan

$10/hr gross is about average for me daytime driver S. Florida

Malcolm Robertson

I wonder why, Harry, you think a rate hike will not a part of the 180 days of change? Do you know something we don’t? I am, however, glad that you think it is on the table.

I think drivers are making a mistake to conceptualize revenue as an hourly rate – except of course as an aid to understanding. Four “short” trips in an hour could yield far more than $20 per hr (including deadhead). This volume wouldn’t necessarily be constant but intermittant throughout the drive shift.

I also wonder whether Uber and Lyft have scouts taking note of our discussions. This seems to me to be reasonable. Ivory tower business decisions are what have gotten us were we are today.

No I just know that if I am Uber I want to grow market share and lower rates does just that (plus Lyft is there now as mentioned above). So I suspect they’ll try everything else first like they’re doing as part of 180 days of Change and then if/when that doesn’t help with retention, they’ll have to raise rates.

VHound

What’s the deal Harry? You liked my post on this subject and then it was removed as spam…! This isn’t the first time. Who’s your judge?

Relax. Not sure why your comment auto went to spam, but I approved it and it’s back up.

Sergio

Be the true advocate of drivers Harry, start a movement for a boycott on a given day once a month until Uber and Lyft raise prices. Both outfits look at drivers as replaceable, let’s see how they react to passengers being stranded on every corner. You have tens of thousands of drivers following you, that’s a good starting point, it should be easy for you to organize!

VMC

I think you’re dreaming a little bit. Harry doesn’t want to rock the boat. He knows where his nickels come from, and barring a major change, he’s not going to advocate for the drivers if it means offending his sponsors.

His paraphrased comment to a DC radio station about route-based pricing says it all “drivers haven’t necessarily benefited from Uber’s price hikes” He also couldn’t resist the temptation to once again point out to the reporter that some drivers are doing well.

Does that sound an advocate to you?

Kaden

I think the commission rate for Lyft & Uber should go back down to 20% or maybe 15%. I think of the system like taxes, if you raise the commission to high, more are gonna quit (less jobs) if you decrease the commission, more will join and current ones will get more from their fare, uber and lyft will take a loss but if a lot of them join it can or will bring up the revenue that they once had. Just by seeing an extra 5-10% on my net income (after commission) it will make a difference.

FP

“It’s the BOOKING FEE STUPID!!! ”

I will continue to harp on this, as this is the MAIN issue with our pay as drivers. I CONSTANTLY hear us all talking about rates, or other things.

Forget the rates! It is ALL about the booking fee. The booking fee should be eliminated all together.

If it weren’t for the booking fee, the rates would sort themselves out. Think about it…. EVERY SINGLE RIDE, Uber gets $1.60(or whatever it is in your market), for YOU SHOWING UP. That means the fuel consumed, time used, the cost for insuring your vehicle during that window, the maintenance cost for that window, you don’t get a single cent for it, but Uber gets $1.60, RIGHT OFF THE TOP, for YOU EXPENDING YOUR RESOURCES to service that ride!!!

Think about it… Uber doesn’t have to really concern themselves with the length of the trip, the duration of the trip, your wasted time, they get a “show-up” fee, that they keep 100% of, while YOU are the one that showed up.

Do you think they care that you are making a $2.20 minimum fare trip? Of course not, they got $1.60 off the top.

Do you think it hurts them to drop the rates? No it doesn’t, b/c they get $1.60 right off the top.

Do you think there is EVER really going to be any incentive for them to raise rates? NO, b/c they get $1.60 right off the top.

And as a matter of fact, the booking fee is the perfect mechanism to raise ONLY their rates. Wait until they figure this out… Oh wait, they already have and have given themselves raises 3 times this year I think.

If not for the booking fee, if Uber wasn’t making the money they wanted, they’d HAVE to raise the rates. The driver and Uber would be in this situation together.

It was so disappointing when I listened to that recent podcast, and the union guy didn’t mention this. Although, don’t get me wrong I still appreciate what they do, as they have already done some good things for drivers, and more than most. But I just wished there was some group, that realized it ‘IS THE BOOKING FEE STUPID,’ and could make some headway into getting that ball rolling.

VMC

It’s much higher than $1.60 in most markets. Some as high as $2.90(Detroit)

Probably the scummiest part of the booking fee is that in the markets with the lowest pay rates, the booking fees are the highest, such as Orlando, where drivers are paid $0.53 per mile, the booking fee is $2.70.

KW

Hi Harry

Great article! I think whatever drivers are paid, ride-share companies should be limited to a charging the driver a percentage of the ride. They shouldn’t be allowed to charge “trust and safety” or “booking” fees. They shouldn’t be allowed to use programs like “upfront pricing” or “route based pricing.” “Quest” and “Boost” promotions should be illegal if we are independent contractors.

Why?

First, the “trust and safety fee” now known as a “booking fee” is a price put on every trip that isn’t shared with the driver. It has allowed the ride-share companies to increase the prices for themselves without the drivers seeing an increase in price. And their increase in this price is getting out of control! In Los Angeles, it was $1.00 then $1.65 (a 65% increase in price the driver doesn’t see) then $1.85 and now around $2.00! This has happened within the 3 years I’ve been a driver. If the ride-share companies aren’t making enough then the drivers aren’t making enough. So the “booking fee” needs to be a part of the percentage they take from us. I’m fine if they settle on an increase in the percentage they take from us, as Longview as it is a one-time increase in percentage. This way if the CFO says the ride-share company isn’t making enough money, they have to increase the price for the drivers also, not just their cut of the ride.

Second, “route-based” and “upfront” pricing are just (not so) clever ways Uber (and Lyft to the extent of “route-based” pricing) are squeezing a higher cut out of every trip. Part of the extra money they are making from the higher squeeze goes towards the boost (or power) zones and Quest.

Which brings me to my third point. Boost and Quest are essentially making a very gray area as to the classification of drivers. When you start collecting money from a customer (like I mentioned above) that your worker isn’t collecting and using that’s money to have them do a specific job (or drive in a certain area) then, to me, that’s an employee and not an independent contractor. Furthermore, Boost and Quest often hurt drivers financially. Uber (and Lyft) use their respective incentives to have drivers cluster in a known surge area prior to the surge happening. For example, in downtown Los Angeles Uber is known for putting a surge (around 1.5x) over it about 30-60 minutes before a concert or sporting event gets out at the Staples Center. What a lot of newer drivers don’t know is unless they’re a stones throw away from any request, they’re not going to get one. They are essentially a pawn or a tricked driver there to fulfill the mass influx of passenger requests. This benefits Uber because passengers are less likely to see a surge and not turn to Lyft or a taxi. This hurt s the driver because any surge is greatly diminished and any driver in downtown LA prior to an event getting out is going to have a tough time getting a passenger request.

Quest is another promotion that negatively affects what a driver makes. For example, last NYE, Uber had a Quest promotion from midnight to 4am in LA. If you did 8 trips, you’d make $125 (or something like that.) Imthought it sounded awesome until I logged in and had a hard time getting a request. I ended turning on Lyft because every person and their grandma was working for Uber that night! Needless to say, I didn’t qualify for Uber’s Quest bonus that night and only made $74 dollars that night compared to $200+ the year before working similar hours.

Ruven Golan

what is ABBA and ABAB?

Sergio

That’s the order of pick up and drop off of pax on an FuberFool ride. If you know how to double dip, you can make good money even on base rides. Don’t ask me what double dip is, can’t tell you.

Ruven Golan

no i’m not up with all the lingo

About

I'm Harry, the owner and founder of The Rideshare Guy Blog and Podcast. I used to be a full-time engineer but now I'm a rideshare blogger! I write about my experience driving for Uber, Lyft, and other services and my goal is to help drivers earn more money by working smarter, not harder. Read More…

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